Thursday, October 14, 2010

Mainstream Economics and the Nobel Crossdressers

Bob Murphy points out  that the "seminal" work of the new Noble Prize winners was written in 1994. He also notes that:
Whether for good or ill, the laureates developed models with all the modern bells and whistles to show this intuitive result [the policy implications of raising unemployment compensation whereby the more compensation, the longer it is for the unemployed to find a work]
He then provides this chart.

This means

A. policy makers haven't been paying attention to economists, such as the new Noble winners (to solve the unemployment problem).

B.  that other economists haven't been paying attention to these Nobel winners, so that the word hasn't been getting out to policy makers (to solve the unemployment prol;em).

C. or policy makers don't care.

I think it is all of the above.

Economists, who in their economic modeling use complex equations to explain the obvious, should be considered buffoons. The simple take on what these guys "discovered" is that if you pay people more when they are unemployed, it will take them longer to find a job.

Anything written beyond this is puffery that only impresses other buffoons. Further, though they might be impressed by the nonsense, other buffoons aren't interested in promoting to policy makers any buffoonery except their own. And policy makers aren't about to spend the time to wade through buffoonery to discover a possible kernel of obvious truth, when policy makers don't even read through the bills they passed.

The truth of the matter is that the solutions to unemployment, inflation and the business cycle were solved long ago in plain simple English. Policy makers really don't want to hear any of it, their agenda is about grabbing money and power.  "Economists" who, by using mad equations, deliver to us the obvious in incomprehensible form are nothing more than the equivalent of confused cross dressers. They might be amusing to look at for two minutes, but you are a nut job if you take them serious for what they pretend to be, and start giving them awards.

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